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CSR reports good results

09-02-2011

CSR has reported its Q4 and full year results for the 52 weeks ended 31 December 2010. They show Q4 revenue and margin at the upper end of market guidance; good results for the full year, and good progress on key catalysts for growth in 2011 and beyond.

• Good progress on key catalysts for growth in 2011 and beyondo Bluetooth and GPS products (CSR8000 and SiRFstarIV) ramping well in handsets, with an important new Tier One Smartphone design win for SiRFstarIV,
o Good Wi-Fi traction with 30 design wins in 2010,
o Further design wins and overall market growth driving our Audio & Consumer and Automotive & Personal Navigation Devices (“PND”) businesses.

• Legal settlement with Broadcom ends all litigation and legal proceedings between the parties.

Commenting, Joep van Beurden, Chief Executive Officer, said: “CSR delivered fourth quarter revenue at the upper end of guidance with a further improvement in our underlying gross margin to 48.7%. Our results for the full year were also robust, with good revenue growth, improved underlying gross margins and a tripling of our underlying operating profit. Underlying earnings per share doubled to $0.43 and cash flow was excellent, increasing to $77.9m (2009: $50.2m). Our recent acquisitions are integrating well and contributing to our revenue growth, and we continue to create value for our shareholders, with a share buyback in the latter part of 2010 and the intention to pay a proposed maiden dividend.

“At our analyst day last November, we highlighted a number of catalysts to drive growth over the next several years, and we are making good progress in delivering on those catalysts. In handsets, our CSR8000 and SiRFstarIV products are ramping well, and we secured a new Tier One design win in GPS. Our progress in Wi-Fi is especially gratifying. Having built a meaningful presence in 2010, we have added 30 design wins over the year. Across our Audio & Consumer and Automotive & PND Businesses, overall market growth and our momentum in design wins from new
and existing customers continue to underpin our performance.

“Our product roadmap and partnership strategies are progressing well. CSR9800, our 40nm Bluetooth/Wi-Fi combination chip and SiRFstarV, our next generation location platform, also on 40nm, are both in advanced stages of development and are receiving good feedback from potential customers. Our SiRFprimaII platform for automotive infotainment now has four Tier One launch customers, and CSR8600, our next generation headset platform, has two Tier One launch customers. With an exciting roadmap of more than 30 new products launching over the next several years and the growth prospects in our markets for connectivity and location expanding, we are confident of our ability to drive shareholder value.”

OUTLOOKFor 2011 overall, we reiterate our expectation to continue growing revenues. We expect first quarter revenues to be in the range of $155m to $170m, reflecting normal seasonality.

NOTES TO FINANCIAL SUMMARY TABLES
Non-GAAP Disclosure: Although International Financial Reporting Standards (“IFRS”) disclosures provide investors with an overall view of CSR’s performance, CSR also provides underlying and aggregated line item disclosure. CSR believes that these underlying and aggregated items (in particular, underlying gross margin, underlying R&D, SG&A expenditure, and operating profit, operating margin, profit before tax and earnings per share derived therefrom) provide additional information on underlying trends that is useful to investors. Management uses these underlying and aggregated measures, along with the most directly comparable IFRS financial measures, to assess CSR’s operating performance and value creation. These underlying and aggregated measures form the basis for management’s performance targets and resource allocation decisions, and are also used to determine and manage the long term growth of the business. We present and discuss these measures in order to: (a) provide consistency with the way management views the business and discuss performance with investors; (b) ensure that the measures are fully understood in the light of how CSR manages the business; (c) properly define the metrics used and confirm their calculation; (d) share the metrics with all investors at the same time; (e) improve transparency for investors; (f) assist investors in their assessment of the long-term value of CSR; and (g) assist investors in understanding management behaviour. The term “underlying” is not defined in IFRS, and may therefore not be comparable with similarly titled measures reported by other companies. Underlying measures should not be considered in isolation from, as substitutes for, or as superior measures to, IFRS measures. A reconciliation of each underlying measure to the nearest IFRS measure is provided in notes 4, 5, 6 and 7.

Qualcomm Incorporated (NASDAQ: QCOM) is the world leader in 3G and next-generation mobile technologies. For more than 30 years, Qualcomm ideas and inventions have driven the evolution of digital communications, linking people everywhere more closely to information, entertainment and each other.